Lecture 1: What is International Political Economy?
2026-01-20
Who I am:
I am a political scientist
I am a post-doctoral researcher, I work with Prof. Strijbis on his project DIVIDE
I am at Franklin since November 2025. Before, I have lived, studied, and worked in Italy, the US, and France
If you are curious about my background, you can check my website
How to reach me:
In this course, the goal is that you
Learn about current topics and debates in IPE
“Think like a social scientist” when interpreting news and events: critically and with analytical rigor
Draw lessons from history
To do so, I want us to communicate as much as possible during the course
This is an interactive course and you will do most of the job in class
Use office hours to clarify doubts, ask questions, discuss progress
I am also interested in continued feedback from you about the course
In a few words, say:
International Political Economy (IPE): the study of interactions between economics and politics in the world economy
This definition encompasses different levels of analysis:
Relations between states: states are “autonomous” agents that interact with others
Domestic sources of international politics: what drives states’ posture in relations between states
International sources of domestic politics: the repercussions of international events or trends in domestic societies and electorates
IPE is a subfield at the intersection of political science and economics. We will look at the world through the glasses of analytical (quantitative) political science
We will learn how (many if not most) contemporary political scientist analyze complex macro-level phenomena
That is, dissecting them into component parts within a unifying framework: rational choice
In short: people, politicians, governments, states… (actors) have goals and motivations and behave (act) according to them. In order to understand their behavior we need to start from what drives them
The goal is to generate knowledge of facts that is generalizable across space and time
Important: mathematical or statistical training is neither necessary nor required for this class. Our focus is on understanding and applying concepts
The final grade is based on
| Assignment | Date due | Midterm weight | Final weight |
|---|---|---|---|
| Paper presentation and discussion (in groups of 3) | Presentation dates: February 17, April 14 | 0% | 20% |
| Midterm exam | March 3 | 60% | 20% |
| Research design (individual) | Due on Moodle by April 24. Short class presentations on April 28, May 1 | 0% | 40% |
| Class participation | Ongoing | 40% | 20% |
See the syllabus for instructions on the group presentation and the research design
You as a group will coordinate to form groups for the paper presentation and fill the group document with your names by the first week of the course
Franklin events with external speakers relevant for the course are part of the syllabus
By the University’s policy:
More generally, you must reflect on the difference between using AI to help you learn and allow your unique talents to emerge and using AI to pretend you have learned
We can view international political economy as the intersection of the substantive area studied by economics – production and exchange of marketable means of want satisfaction – with the process by which power is exercised that is central to politics.
Keohane (1984, Ch. 2)
The core actors are individuals as producers and consumers
Free trade is a “positive-sum” game which makes all parties involved better off
Free markets are the most efficient way to allocate resources
Economics and politics are autonomous domains (and should not be mixed)
The government’s role should be limited to setting “fair” rules of the game and provide public goods (e.g., property rights protection, defense…) so that the market can flourish
Absence of conflict is natural: mutual economic interest from trade prevents wars
The core actors are the classes: capitalists (owners of means of production) and workers (owners of labor)
The economic-political system is shaped by capitalism and conflicting economic interests
Politics is subordinated to economic forces
Capitalism expands globally to find new markets and exploitable labor \(\implies\) imperialism
Capitalism creates a hierarchical international system (core-periphery). This system maintains peripheral countries underdeveloped
Conflict is natural
The core actors are the states
States’ decisions are driven by power, its use and the desire to increase it relative to other states
Economics is subordinated to political forces
States can undermine free trade (e.g., reduce their engagement or monopolize parts of the economy) if this can strengthen their power vis-a-vis other states in other ways
Absence of conflict is possible if a single actor is so powerful to enforce rules \(\implies\) Hegemonic stability
The core actors are states
States have common interests, but self-interest prevents from pursuing it
They create institutions (codified “rules of the game”) to enforce cooperation for mutual benefit
Economics and politics interact through the incentives and rational choices of states
Absence of conflict (cooperation) is not natural, but can be achieved
All traditional theories provide important, sometimes crucial, insights. In contemporary political science, the prevailing methodological framework (and the defining methodological framework of economics) is rational choice
New Institutionalist theory is an example of rational choice theory
There are several advantages. We can incorporate some key insights of traditional theories
The rational choice approach is built on a few general postulates:
Of course we generally don’t know preferences or beliefs of others. We use assumptions about them to build models that can explain patterns of behavior. It is well understood that models are “wrong but sometimes useful”
Methodological individualism does not mean that we believe all people are selfish in a caricatural sense or have only material motivations.
We will see that it is difficult to understand the backlash against globalization without non-material concepts such as pride, dignity, community, culture
Incorporating these concepts into rational choice is challenging, but many people (including the DIVIDE team) work on that all the time
The advantage of RC is to allow us to examine what assumptions fail in the model and to work to improve them
Recall the different “levels” of analysis. We can now give them a structure in terms of actors and relations
We often want to “aggregate” up to the level of states or governments to study macro-phenomena
Is it correct? It depends
Treating states as unitary actors in a model is equivalent to assuming that who runs the state has full mandate on international issues (or that only their preferences matter)
Whether this is justified or not depends on the specific theory
The RC approach helps us understand and evaluate constraints of high-level actors and the consequences of their actions
We will use the rational choice framework to understand the nature of problems that require international cooperation
That is, problems where “individual” incentives may clash with collective goals (trade liberalization, climate change, etc.)